History

Early history

The oldest traces of human existence in Liechtenstein date back to the Middle Paleolithic era.[10]Neolithic farming settlements were initially founded in the valleys around 5300 BCE.

The Hallstatt and La Tène cultures flourished during the late Iron Age, from around 450 BCE—possibly under some influence of both the Greek and Etruscan civilisations. One of the most important tribal groups in the Alpine region were the Helvetii. In 58 BCE, at the Battle of Bibracte, Julius Caesar defeated the Alpine tribes, therefore bringing the region under close control of the Roman Republic. By 15 BCE, Tiberius—destined to be the second Roman emperor—with his brother, Drusus, conquered the entirety of the Alpine area. Liechtenstein was then integrated into the Roman province of Raetia. The area was maintained by the Roman military, who also maintained large legionary camps at Brigantium (Austria), near Lake Constance, and at Magia (Swiss). A Roman road which ran through the territory was also created and maintained by these groups. In 259/60 Brigantium was destroyed by the Alemanni, a Germanic people who settled in the area in around 450 CE.

In 1396 Vaduz (the southern region of Liechtenstein) was raised to the status of "imperial immediacy" and as such made subject to the Holy Roman Emperor alone.[14]

The family, from which the principality takes its name, originally came from Liechtenstein Castle in Lower Austria which they had possessed from at least 1140 until the 13th century (and again from 1807 onwards). The Liechtensteins acquired land, predominantly in Moravia, Lower Austria, Silesia, and Styria. As these territories were all held in feudal tenure from more senior feudal lords, particularly various branches of the Habsburgs, the Liechtenstein dynasty was unable to meet a primary requirement to qualify for a seat in the Imperial diet (parliament), the Reichstag. Even though several Liechtenstein princes served several Habsburg rulers as close advisers, without any territory held directly from the Imperial throne, they held little power in the Holy Roman Empire.

For this reason, the family sought to acquire lands that would be classed as unmittelbar (immediate) or held without any intermediate feudal tenure, directly from the Holy Roman Emperor. During the early 17th century Karl I of Liechtenstein was made a Fürst (prince) by the Holy Roman Emperor Matthias after siding with him in a political battle. Hans-Adam I was allowed to purchase the minuscule Herrschaft ("Lordship") of Schellenberg and county of Vaduz (in 1699 and 1712 respectively) from the Hohenems. Tiny Schellenberg and Vaduz had exactly the political status required: no feudal lord other than their comital sovereign and the suzerain Emperor.

Principality

On 23 January 1718, after the lands had been purchased, Charles VI, Holy Roman Emperor, decreed that Vaduz and Schellenberg were united and elevated the newly formed territory to the dignity of Fürstentum (principality) with the name "Liechtenstein" in honour of "[his] true servant, Anton Florian of Liechtenstein". It was on this date that Liechtenstein became a sovereign member state of the Holy Roman Empire. It is a testament to the pure political expediency of the purchase that the Princes of Liechtenstein never visited their new principality for almost 100 years.

By the early 19th century, as a result of the Napoleonic Wars in Europe, the Holy Roman Empire came under the effective control of France, following the crushing defeat at Austerlitz by Napoleon in 1805. Emperor Francis II abdicated, ending more than 960 years of feudal government. Napoleon reorganized much of the Empire into the Confederation of the Rhine. This political restructuring had broad consequences for Liechtenstein: the historical imperial, legal, and political institutions had been dissolved. The state ceased to owe an obligation to any feudal lord beyond its borders.[15]

Modern publications generally attribute Liechtenstein's sovereignty to these events. Its prince ceased to owe an obligation to any suzerain. From 25 July 1806, when the Confederation of the Rhine was founded, the Prince of Liechtenstein was a member, in fact, a vassal, of its hegemon, styled protector, the French Emperor Napoleon I, until the dissolution of the confederation on 19 October 1813.

In 1818, Prince Johann I granted the territory a limited constitution. In that same year Prince Aloys became the first member of the House of Liechtenstein to set foot in the principality that bore their name. The next visit would not occur until 1842.

Developments during the 19th century included:

1836, the first factory, for making ceramics, was opened.

1861, the Savings and Loans Bank was founded along with the first cotton-weaving mill.

1868, the Liechtenstein Army was disbanded for financial reasons.

1872, a railway line between Switzerland and the Austro-Hungarian Empire was constructed through Liechtenstein.

1886, two bridges over the Rhine to Switzerland were built.

20th century

Until the end of World War I, Liechtenstein was closely tied first to the Austrian Empire and later to Austria-Hungary; the ruling princes continued to derive much of their wealth from estates in the Habsburg territories, and they spent much of their time at their two palaces in Vienna. The economic devastation caused by this war forced the country to conclude a customs and monetary union with its other neighbour, Switzerland.

At the time of the dissolution of the Austro-Hungarian Empire, it was argued that Liechtenstein, as a fief of the Holy Roman Empire, was no longer bound to the emerging independent state of Austria, since the latter did not consider itself as the legal successor to the empire. This is partly contradicted by the Liechtenstein perception that the dethroned Austro-Hungarian Emperor still maintained an abstract heritage of the Holy Roman Empire.

In 1929, 75-year-old Prince Franz I succeeded to the throne. Franz had just married Elisabeth von Gutmann, a wealthy woman from Vienna whose father was a Jewish businessman from Moravia. Although Liechtenstein had no official Nazi party, a Nazi sympathy movement arose within its National Union party.Local Liechtenstein Nazis identified Elisabeth as their Jewish "problem".[16]

In March 1938, just after the annexation of Austria by Nazi Germany, Prince Franz named as regent his 31-year-old grandnephew and heir-presumptive, Prince Franz Joseph. Franz died in July that year, and Franz Joseph succeeded to the throne. Franz Joseph II first moved to Liechtenstein in 1938, a few days after Austria's annexation.[14]

During World War II, Liechtenstein remained officially neutral, looking to neighbouring Switzerland for assistance and guidance, while family treasures from dynastic lands and possessions in Bohemia, Moravia, and Silesia were taken to Liechtenstein for safekeeping. At the close of the conflict, Czechoslovakia and Poland, acting to seize what they considered to be German possessions, expropriated the entirety of the Liechtenstein dynasty's properties in those three regions. The expropriations (subject to modern legal dispute at the International Court of Justice) included over 16000NaN0 of agricultural and forest land (most notably the UNESCO listed Lednice–Valtice Cultural Landscape), and several family castles and palaces.

Citizens of Liechtenstein were forbidden to enter Czechoslovakia during the Cold War. More recently the diplomatic conflict revolving around the controversial post-war Beneš decrees resulted in Liechtenstein not sharing international relations with the Czech Republic or Slovakia. Diplomatic relations were established between Liechtenstein and the Czech Republic on 13 July 2009,[18][19][20] and with Slovakia on 9 December 2009.[21]

Financial centre

Liechtenstein was in dire financial straits following the end of the war in Europe. The Liechtenstein dynasty often resorted to selling family artistic treasures, including the portrait Ginevra de' Benci by Leonardo da Vinci, which was purchased by the National Gallery of Art of the United States in 1967 for 5 million ($ million in dollars), then a record price for a painting.

However, by the late 1970s, it used its low corporate tax rates to draw many companies to the country, becoming one of the wealthiest countries in the world.

Government

Liechtenstein has a constitutional monarch as Head of State, and an elected parliament which enacts the law. It is also a direct democracy, where voters can propose and enact constitutional amendments and legislation independent of the legislature. The Constitution of Liechtenstein was adopted in March 2003, replacing the previous 1921 constitution which had established Liechtenstein as a constitutional monarchy headed by the reigning prince of the Princely House of Liechtenstein. A parliamentary system had been established, although the reigning Prince retained substantial political authority.

The reigning Prince is the head of state and represents Liechtenstein in its international relations (although Switzerland has taken responsibility for much of Liechtenstein's diplomatic relations). The Prince may veto laws adopted by parliament. The Prince can call referenda, propose new legislation, and dissolve parliament, although dissolution of parliament may be subject to a referendum.[23]

Executive authority is vested in a collegiate government comprising the head of government (prime minister) and four government councilors (ministers). The head of government and the other ministers are appointed by the Prince upon the proposal and concurrence of parliament, thus reflecting the partisan balance of parliament. The constitution stipulates that at least two members of the government be chosen from each of the two regions.[24] The members of the government are collectively and individually responsible to parliament; parliament may ask the Prince to remove an individual minister or the entire government.

Legislative authority is vested in the unicameral Landtag made up of 25 members elected for maximum four-year terms according to a proportional representation formula. Fifteen members are elected from the "Oberland" (Upper Country or region) and ten members are elected from the "Unterland" (Lower Country or region).[25] Parties must receive at least 8% of the national vote to win seats in parliament, i.e. enough for 2 seats in the 25-seat legislature. Parliament proposes and approves a government, which is formally appointed by the Prince. Parliament may also pass votes of no confidence in the entire government or individual members.

Parliament elects from among its members a "Landesausschuss" (National Committee) made up of the president of the parliament and four additional members. The National Committee is charged with performing parliamentary oversight functions. Parliament can call for referenda on proposed legislation. Parliament shares the authority to propose new legislation with the Prince and with the number of citizens required for an initiative referendum.[26]

Judicial authority is vested in the Regional Court at Vaduz, the Princely High Court of Appeal at Vaduz, the Princely Supreme Court, the Administrative Court, and the State Court. The State Court rules on the conformity of laws with the constitution and has five members elected by parliament.

On 1 July 1984, Liechtenstein became the last country in Europe to grant women the right to vote. The referendum on women's suffrage, in which only men were allowed to participate, passed with 51.3% in favour.[27]

New constitution

In a national referendum in March 2003, nearly two-thirds of the electorate voted in support of Hans-Adam II's proposed new constitution to replace the 1921 version. The proposed constitution was criticised by many, including the Council of Europe, as expanding the powers of the monarchy (continuing the power to veto any law, and allowing the Prince to dismiss the government or any minister). The Prince threatened that if the constitution failed, he would, among other things, convert some of the royal property for commercial use and move to Austria.[28] The princely family and the Prince enjoy tremendous public support inside the nation, and the resolution passed with about 64% in favour.[29] A proposal to revoke the Prince's veto powers was rejected by 76% of voters in a 2012 referendum.[30]

Few national constitutions provide a right of secession, but municipalities in Liechtenstein are entitled to secede from the union by majority vote.[31]

International awards

In the year 2013, Liechtenstein won for the first time a SolarSuperState Prize in the category Solar recognizing the achieved level of the usage of photovoltaics per population within the state territory.[32] The SolarSuperState Association justified this prize with the cumulative installed photovoltaic power of some 290 Watt per capita at the end of 2012. This level placed Liechtenstein second in the world after Germany. Also in the year 2014, the SolarSuperState Association awarded the 2. SolarSuperState Prize in the category Solar to Liechtenstein.[33] In the years 2015 and 2016, Liechtenstein was honored with the 1. SolarSuperState Prize in the category Solar because the state had the world's biggest cumulative installed photovoltaic power per population.[34][35]

Geography

Liechtenstein is situated in the Upper Rhine valley of the European Alps and is bordered to the east by Austria, and to the south and west by Switzerland. The entire western border of Liechtenstein is formed by the Rhine. Measured south to north the country is about 24km (15miles) long. Its highest point, the Grauspitz, is 2599m (8,527feet). Despite its Alpine location, prevailing southerly winds make the climate of Liechtenstein comparatively mild. In winter, the mountain slopes are well suited to winter sports.

New surveys using more accurate measurements of the country's borders in 2006 have set its area at 160km2, with borders of 77.9km (48.4miles).[36] Thus, it was discovered in 2006 that Liechtenstein's borders are 1.9km (01.2miles) longer than previously thought.[37]

Liechtenstein is one of only two doubly landlocked countries in the world[38] —being a landlocked country wholly surrounded by other landlocked countries (the other is Uzbekistan). Liechtenstein is the sixth-smallest independent nation in the world by land area.

Economy

Despite its limited natural resources, Liechtenstein is one of the few countries in the world with more registered companies than citizens; it has developed a prosperous, highly industrialized free-enterprise economy and boasts a financial service sector as well as a living standard that compares favourably with those of the urban areas of Liechtenstein's much larger European neighbours.

Liechtenstein participates in a customs union with Switzerland and employs the Swiss franc as the national currency. The country imports about 85% of its energy. Liechtenstein has been a member of the European Economic Area (an organization serving as a bridge between the European Free Trade Association (EFTA) and the European Union) since May 1995. The government is working to harmonize its economic policies with those of an integrated Europe. In 2008, the unemployment rate stood at 1.5%. Currently, there is only one hospital in Liechtenstein, the Liechtensteinisches Landesspital in Vaduz. As of 2014 the CIA World Factbook estimated the gross domestic product (GDP) on a purchasing power parity basis to be $4.978 billion. As of 2009 the estimate per capita was $139,100, which is the highest listed for the world.[38]

Industries include electronics, textiles, precision instruments, metal manufacturing, power tools, anchor bolts, calculators, pharmaceuticals, and food products. Its most recognizable international company and largest employer is Hilti, a manufacturer of direct fastening systems and other high-end power tools. Liechtenstein produces wheat, barley, corn, potatoes, dairy products, livestock, and wine. Tourism accounts for a large portion of the country's economy.

Taxation

The government of Liechtenstein taxes personal, business income, and principal (wealth). The basic rate of personal income tax is 1.2%. When combined with the additional income tax imposed by the communes, the combined income tax rate is 17.82%.[39] An additional income tax of 4.3% is levied on all employees under the country's social security programme. This rate is higher for the self-employed, up to a maximum of 11%, making the maximum income tax rate about 29% in total. The basic tax rate on wealth is 0.06% per annum, and the combined total rate is 0.89%. The tax rate on corporate profits is 12.5%.[38]

Liechtenstein's gift and estate taxes vary depending on the relationship the recipient has to the giver and the amount of the inheritance. The tax ranges between 0.5% and 0.75% for spouses and children and 18% to 27% for non-related recipients. The estate tax is progressive.

Liechtenstein has previously received significant revenues from Stiftungen ("foundations"), which are financial entities created to hide the true owner of nonresident foreigners' financial holdings. The foundation is registered in the name of a Liechtensteiner, often a lawyer. This set of laws used to make Liechtenstein a popular tax haven for extremely wealthy individuals and businesses attempting to avoid or evade taxes in their home countries.[40] In recent years, Liechtenstein has displayed a stronger determination to prosecute international money-launderers and has worked to promote the country's image as a legitimate finance center. In February 2008, the country's LGT Bank was implicated in a tax-fraud scandal in Germany, which strained the ruling family's relationship with the German government. Crown Prince Alois has accused the German government of trafficking in stolen goods, referring to its $7.3 million purchase of private banking information offered by a former employee of LGT Group.[41][42] However, the United States Senate's subcommittee on tax haven banks said that the LGT bank, owned by the princely family, and on whose board they serve, "is a willing partner, and an aider and abettor to clients trying to evade taxes, dodge creditors or defy court orders".[43]

In August 2009, the British government department HM Revenue & Customs agreed with Liechtenstein to start exchanging information. It is believed that up to 5,000 British investors have roughly £3 billion deposited in accounts and trusts in the country.[47]

In October 2015, the European Union and Liechtenstein signed a tax agreement to ensure the automatic exchange of financial information in case of tax disputes. The collection of data started in 2016, and is another step to bring the principality in line with other European countries with regard to its taxation of private individuals and corporate assets.[48]

Liechtensteiners have an average life expectancy at birth of 80.31 years, subdividing as male: 76.86 years, female: 83.77 years (2011 est.). The infant mortality rate is 4.64 deaths per 1,000 live births, according to recent estimates.

Languages

The official language is German; most speak an Alemannicdialect of German that is highly divergent from Standard German but closely related to those dialects spoken in neighbouring regions such as Switzerland and Vorarlberg, Austria. In Triesenberg, a dialect promoted by the municipality is spoken. However, Swiss Standard German is understood and spoken by most people within the country.

Religion

Liechtenstein offers protection to adherents of all religious beliefs, and considers the "religious interests of the people" a priority of the government. In Liechtenstein schools, although exceptions are allowed, religious education in Roman Catholicism or Protestantism (either Reformed or Lutheran, or both) is legally required.[50]Tax exemption is granted by the government to religious organizations.[50] According to the Pew Research Center, social conflict caused by religious hostilities is ranked low in Liechtenstein, and so is the amount of government restriction on the practice of religion.[51]

There are four stations in Liechtenstein, namely Schaan-Vaduz, Forst Hilti, and Nendeln and Schaanwald, served by an irregularly stopping train service between Feldkirch and Buchs provided by the Austrian Federal Rail Service. While EuroCity and other long-distance international trains also travel along the route, they do not normally call at the stations within the borders of Liechtenstein.

Culture

As a result of its small size, Liechtenstein has been strongly affected by external cultural influences, most notably those originating in the southern German-speaking areas of Europe, including Austria, Baden-Wurttemberg, Bavaria, Switzerland, and specifically Tirol and Vorarlberg. The "Historical Society of the Principality of Liechtenstein" plays a role in preserving the culture and history of the country.

The largest museum is the Kunstmuseum Liechtenstein, an international museum of modern and contemporary art with an important international art collection. The building by the Swiss architects Morger, Degelo, and Kerez is a landmark in Vaduz. It was completed in November 2000 and forms a "black box" of tinted concrete and black basalt stone. The museum collection is also the national art collection of Liechtenstein.

The other important museum is the Liechtenstein National Museum (Liechtensteinisches Landesmuseum) showing permanent exhibition on the cultural and natural history of Liechtenstein as well as special exhibitions. There is also a stamp museum, ski museum, and a 500-year-old Rural Lifestyle Museum.

The Private Art Collection of the Prince of Liechtenstein, one of the world's leading private art collections, is shown at the Liechtenstein Museum in Vienna.

On the country's national holiday all subjects are invited to the castle of the head of state. A significant portion of the population attends the national celebration at the castle where speeches are made and complimentary beer is served.[60]

Music and theatre are an important part of the culture. There are numerous music organizations such as the Liechtenstein Musical Company, the annual Guitar Days, and the International Josef Gabriel Rheinberger Society, which play in two main theatres.

Amateur radio is a hobby of some nationals and visitors. However, unlike virtually every other sovereign nation, Liechtenstein does not have its own ITU prefix. It uses Switzerland's callsign prefixes (typically "HB") followed by a zero.

The Liechtenstein national football team is regarded as an easy target for any team drawn against them; this was the basis for a book about Liechtenstein's unsuccessful qualifying campaign for the 2002 World Cup by British author, Charlie Connelly. In one surprising week during autumn 2004, however, the team managed a 2–2 draw with Portugal, who only a few months earlier had been the losing finalists in the European Championships. Four days later, the Liechtenstein team traveled to Luxembourg, where they defeated the home team 4–0 in a 2006 World Cup qualifying match. In the qualification stage of the European Championship 2008, Liechtenstein beat Latvia 1–0, a result which prompted the resignation of the Latvian coach. They went on to beat Iceland 3–0 on 17 October 2007, which is considered one of the most dramatic losses of the Icelandic national football team. On 7 September 2010, they came within seconds of a 1–1 draw against Scotland in Glasgow, having led 1–0 earlier in the second half, but Liechtenstein lost 2–1 thanks to a goal by Stephen McManus in the 97th minute. On 3 June 2011, Liechtenstein defeated Lithuania 2–0. On 15 November 2014, Liechtenstein defeated Moldova 0-1 with Franz Burgmeier's late free kick goal in Chișinău.

As an alpine country, the main sporting opportunity for Liechtensteiners to excel is in winter sports such as downhill skiing: the country's single ski area is Malbun. Hanni Wenzel won two gold medals and one silver medal in the 1980 Winter Olympics (she won bronze in 1976), her brother Andreas won one silver medal in 1980 and one bronze medal in 1984 in the giant slalom event, and her daughter Tina Weirather won a bronze medal in 2018 in the Super-G. With ten medals overall (all in alpine skiing), Liechtenstein has won more Olympic medals per capita than any other nation.[61] It is the smallest nation to win a medal in any Olympics, Winter or Summer, and the only nation to win a medal in the Winter Games but not in the Summer Games. Other notable skiers from Liechtenstein are Marco Büchel, Willi Frommelt, Paul Frommelt and Ursula Konzett. Liechtenstein is also the home country of Stephanie Vogt, a professional women's tennis player.

Youth

Liechtenstein competes in the Switzerland U16 Cup Tournament, which offers young players an opportunity to play against top football clubs.

Security and defence

The Liechtenstein National Police is responsible for keeping order within the country. It consists of 87 field officers and 38 civilian staff, totaling 125 employees. All officers are equipped with small arms. The country has one of the world's lowest crime rates. Liechtenstein's prison holds few, if any, inmates, and those with sentences over two years are transferred to Austrian jurisdiction. The Liechtenstein National Police maintains a trilateral treaty with Austria and Switzerland that enables close cross-border cooperation among the police forces of the three countries.[62]

Liechtenstein follows a policy of neutrality and is one of the few countries in the world that maintain no military. The army was abolished soon after the Austro-Prussian War of 1866, in which Liechtenstein fielded an army of 80 men, although they were not involved in any fighting. The demise of the German Confederation in that war freed Liechtenstein from its international obligation to maintain an army, and parliament seized this opportunity and refused to provide funding for one. The Prince objected, as such a move would leave the country defenceless, but relented on 12 February 1868 and disbanded the force. The last soldier to serve under the colors of Liechtenstein died in 1939 at age 95.[63]

During the 1980s the Swiss army fired off shells during an exercise and mistakenly burned a patch of forest inside Liechtenstein. The incident was said to have been resolved "over a case of white wine".[60]

In March 2007, a 170-person Swiss infantry unit got lost during a training exercise and inadvertently crossed 1.5km (00.9miles) into Liechtenstein. The accidental invasion ended when the unit realized their mistake and turned back.[64] The Swiss army later informed Liechtenstein of the incursion and offered official apologies,[65] to which an internal ministry spokesperson responded, "No problem, these things happen."[66]